Insurance Commissioner Ricardo Lara has been under fire since 2019, when news media reported questionable campaign contributions from associates of Applied Underwriters, while Applied was under investigation by the CDI, and seeking approval of the sale of the company..

Lara reported accepting more than $50,000 in donations from insurance company executives and their apparent spouses, according to a 2019 San Diego Union-Tribune analysis of campaign funding data.

At that time, Lara reported $31,000 in contributions from Stephen Acunto and his wife, Carole. Acunto is president of CINN Group, a New York publishing and financial services firm. Acunto, who also has served as a spokesman for Applied Underwriters.

The donations from the Acuntos to Lara came on April 30 2019, one month before Applied Underwriters alerted the California Department of Insurance that the company was in the process of being sold.

Although most news media discontinued following the story, Consumer Watchdog pursued the investigation with Freedom of Information Act requests. The requests were follow up by a Public Records Act lawsuit, brought by attorneys for Consumer Watchdog was filed in early 2020. Consumer Watchdog is a non-profit public interest organization.

And the lawsuit provided evidence this month that Lara and top lieutenant Bryant Henley communicated with two former lawmakers representing a workers’ compensation insurer at the heart of a pay-to-play scandal. The communications occurred while a high-profile merger and other regulatory matters involving the insurer were pending before the California Department of Insurance.

A new declaration from former legislator-turned-lobbyist Rusty Areias confirms that Commissioner Lara and Special Counsel Bryant Henley were in contact with Mr. Areias and former Assembly Speaker Fabian Nunez, Lara’s friend and political mentor. The declaration states that Areias and Nunez identified themselves as representing Applied Underwriters, the workers’ compensation insurer that directed tens of thousands of dollars in campaign donations to Lara’s 2022 re-election campaign.

The communications occurred around the time Henley intervened in at least four proceedings on Commissioner Lara’s behalf to benefit Applied Underwriters. When the scandal became public in mid-2019, Lara returned the campaign contributions, stating “I believe in transparency….. I believe effective public service demands constant adherence to the highest ethical standards.”

Despite Commissioner Lara’s pledge of “transparency,” Consumer Watchdog says the the Department of Insurance failed to search for, let alone produce, records of meetings and communications with individuals “representing” the workers’ compensation insurer, including Nunez and Areias.

According to Mr. Areias’s declaration, submitted under penalty of perjury, Nunez and Areias began communicating with Commissioner Lara and Bryant Henley as early as February 2019. Yet, not a single record of meetings or phone calls between Nunez and Areias and Lara and Henley or other Department staff has been disclosed – no phone records, no calendar entries, no emails or text messages.

Nunez and Areias have emerged as central figures in the scandal following a lawsuit filed by Fabian Nunez’s former lobbying firm to collect a $2 million “success fee” from Applied Underwriters related to the sale of the company. The payment was to be made in exchange for Nunez and Areias’s successful efforts to protect a $60 million deposit.

The declaration of Mr. Areias was filed in Los Angeles Superior Court with a motion seeking to compel the Department to produce 200 internal communications regarding Consumer Watchdog’s public records requests. Consumer Watchdog expects that “these communications likely reflect the Department’s decision to withhold key information from the public.” This Motion is scheduled for April 27, 2022 at 9:30 a.m. Department 86 of the Los Angeles Superior Court.